DBS cuts 900 jobs in first mass layoff since 2001, Q3 2008 profit falls 38%

This article belongs to the Singapore recession watch story arc.

channelnewsasia.com :

Singapore's DBS Group, Southeast Asia's biggest bank by assets, said on Friday [7 Nov 2008] it would be laying off 900 staff to trim costs amid the global credit crisis. CEO Richard Stanley said most of the cuts, which would be carried out at the end of the month, will come from its offices in Singapore and Hong Kong and will account for 6% of the workforce. The job cut will be across all businesses and all levels. DBS said it has no plans to cut beyond this. Back in 2001, DBS laid off 200 staff in Singapore and implemented pay cuts. Earlier, DBS said net profit in Q3 2008 fell 38% as market-related income took a hit from the global financial crisis and bigger provisions. Singapore's deputy labour chief said retrenchments would still remain relatively low this year at about 10,000 jobs.

- It wasn't too long ago that the media over here had been talking about layoffs in the financial sector "as early as December". Well, it looks like DBS has pulled the trigger a month early. A shot heard all around Singapore. So what if DBS says it has no further plans to cut. That can be a valid statement only *at this point* in time. Come 2009, when global economic conditions deteriorate even further, all bets are off. Good luck.

Las Vegas Sands plunges below $8 on loan default concerns, down 94% from Oct 2007

This article belongs to the Singapore recession watch story arc.

bloomberg.com :

Las Vegas Sands plunged in New York trading after saying it may be in default of some loans if it can't raise capital, threatening its ability to keep operating "as a going concern," the casino company said in a regulatory filing today [6 Nov 2008]. Las Vegas Sands dropped below $8 on the NYSE, down over 94% from a high of $145.57 in Oct 2007. The filing sparked new concerns that casino cash flow is dwindling just as Las Vegas Sands undertakes its biggest expansion. The owner of the Venetian and Palazzo casino resorts on the Las Vegas Strip, where gambling revenue has fallen for 8 straight months, is building almost $17 billion worth of resorts in Singapore, China's Macau and Bethlehem, Pennsylvania.

- Now, weren't the casinos, euphemistically named IR's (integrated resorts), going to save the Singapore economy, together with the Formula 1 races? The 2 casinos were supposed to create 10,000 jobs each. And require over 50MW of electrical power apiece to boot. It would have been a worthwhile effort, even including the fossil fuel yet to be burnt, and it might just have been a helpful thing for a faltering economy heading deeper in recession, if execution were to go through flawlessly. But now it seems that the execution of all these plans seems to be in some doubt, as the value of the Las Vegas Sands shares has dropped over 94% from its Oct 2007 highs, and down over 30% in today's [6 Nov 2008] trading session alone.

Once again, the peakoiler community has proven amazingly prescient in its forecasting ability. One of the central points of discussion over the years has been about the fate of cities such as Las Vegas in an era of peak oil and general economic decline. We all said at the time, and we are still saying it now, that Las Vegas, together with its associated gambling companies, is toast. The latest thread on this subject is titled "Sin City is in trouble", and you can read it all for yourself.

I am watching Las Vegas Sands [LVS] shares collapse in real time on its Google Finance page with a mixture of frustration, shock, and a heavy dose of "we told you so". And thinking of another favourite phrase from our community : "we haven't seen anything yet." It's a race to the bottom that nobody wins. What can the government do? What can anyone do?

(2008-11-07 00:46:35 SGT) [Biz] Permalink

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